Per Zero Hedge:
Way back in June, we noted that auto sales had reached 10-year highs on record credit, record loan terms, and record ignorance. We based that assessment on the following set of Q1 data from Experian:
Average loan term for new cars is now 67 months - a record.
Average loan term for used cars is now 62 months - a record.
Loans with terms from 74 to 84 months made up 30% of all new vehicle financing - a record.
Loans with terms from 74 to 84 months made up 16% of all used vehicle financing - a record.
The average amount financed for a new vehicle was $28,711 - a record.
The average payment for new vehicles was $488 - a record.
The percentage of all new vehicles financed accounted for by leases was 31.46% - a record.
In short, the "renaissance" in US auto sales is being driven (no pun intended) by increasingly risky underwriting practices and this is leading directly to the securitization of shoddier and shoddier collateral pools in a return to the "originate to sell" model that drove the housing bubble over a cliff in 2008.
As Comptroller of the Currency Thomas Curry recently put it, "what's happening in the auto loan market reminds me of what happened in mortgage-backed securities in the run-up to the crisis."
“But here’s the good news: Manufacturing now represents a relatively small segment of the U.S. economy”
Yeah, real good news. Idiot.
Yep. Washers, dryers, refrigerators and toaster sales don’t matter. With the electricity Obama is keeping from being produced via coal, these conveniences are just superfluous.
When there comes a war it is going to matter a lot.
When the USA can no longer borrow more money or pay the interest on the debt then it is going to matter.
When the “Free Money” spicket is therefore turned off then it is going to matter a whole lot.
To create wealth you must make something. Whether it is a bushel of potatoes or an airplane, one has created something others want.
That is why short term., the news sounds good. Long term, it means a much much lower standard of living.